The government proposal by José Antonio Kast to deregulate land use in Chile poses a risk of increased housing exclusion by weakening urban planning instruments, according to a report by elmostelador.cl.
The plan seeks to modify the calculation of inhabitants per dwelling, lowering the standard from 4 people to 2.8. This measure would allow for more units to be built on the same plot of land with fewer regulatory requirements.
However, the news outlet warns that the measure lacks mechanisms to ensure that these cost savings are passed on to the public through more affordable prices.
In a market characterized by concentrated competition, the direct benefit of this deregulation is captured by real estate developers. This turns housing into a financial asset for appreciation rather than a space for living.
Impact on the Rental Market
The crisis is evident not only in the lack of supply but also in the unaffordability of homeownership. The national housing deficit is estimated to reach 663,000 households by 2025, according to figures from Déficit Cero.
Over the last decade, housing prices have risen four times faster than real household incomes. Currently, only 17% of Chilean households can access a mortgage, according to the Toctoc platform.
This situation has pushed the population toward the rental market, which now accounts for 26.2% of Chilean households according to the 2024 Census. However, this sector lacks regulation, transparency, and protections for tenants.
Lease agreements are often pegged to the UF (inflation-indexed unit), while wages are not adjusted monthly. Furthermore, there are no clear legal limits on security deposits, nor is there a public registry of neighborhood-specific prices.
This information asymmetry particularly affects the most vulnerable sectors. More than 560,000 households spend over 30% of their income on rent, according to 2022 Casen survey data.
To reverse this trend, proposed measures include banning the use of the UF in rental contracts and limiting security deposits to a single month. There are also proposals to create "Protected Rental Zones," where rent increases would not exceed the inflation rate (IPC).
Other proposals include the creation of a Public Rental Market Observatory and the application of presumptive income tax on vacant properties to curb speculative hoarding.
